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Tuesday, October 30, 2007
Post Market Commentary
The market started the day on a strong note but within a span of time, it gave up it gains and started trading with little volatility & cautious approach ahead of the RBI''s review policy. Further in the noon session, the RBI came out with its policy, which stated that the CRR is hiked by 50 bps to 7.5% from 7.0% and the other key rates including the repo and reverse repo rates are remained unchanged. The market continued trading flat with a bit of volatility but no turbulence. It remained unaffected by the new credit policy, as the credit policy is largely inline with street expectations. Finally in the last few minutes, the market ran under heavy selling & the benchmark index Sensex ended up with a loss of 194.16 points to close at 19,783.51, whereas Nifty also closed with a loss of 37.15 points to close at 5,868.75. All the indices ended in red territory except Capital Goods, Metal & Realty. Further, BSE Midcap and BSE Smallcap also closed lower with a loss of 34.47 points and 60.76 points at 8,048.07 & 9,644.44 respectively. The market breadth stood as negative with over 1087 stocks on the advancing side and over 1666 stocks on the decline side.
BSE Capital goods closed with the marginal gain of 158.91 points at 20,006.57. Fueled it up are ABB Ltd with the gain of (5.70%), Jyoti Structures (3.09%), Seimens (2.59%), AIA Engineering (2.51%), and BHEL (1.63%).
BSE Metal also managed to close in green with a gain of 112.48 points to close at 17,302.22. Scrips supported are, Sterlite (6.63%), Jindal Steel (6.47%), & Sesa Goa (2.06%).
BSE Realty stood at the third position as a gainer surged 241.98 points to close at 10,516.99. Scrips gained are DLF Ltd (5.78%), Anant Raj (5.21%), Ansal Infra (2.57%), & Unitech Ltd (1.50%).
BSE Auto stood as the top loser for the day closed lower by 176.54 points at 5,479.89. Scrips dragged the index down are Maruti Suzuki down by (8.46%), Mah & Mah (7.00%), Tata Motors (4.93%), and Punjab Tractors (3.65%).
Market falls below 20K on profit bookings
Unabated selling towards the end of the session saw the Sensex lose 454 points from the day's high of 20,238. The market continued to witness volatility till the mid-morning trades. But, dipped by more than 200 points after the Reserve Bank of India announced the CRR hike by 50 basis points while keeping bank rate, repo rate and reverse repo rate unchanged. However, the clarity over the monetary policy led a recovery from the low levels and the Sensex entered into the green. Thereafter the market moved with in a range with a positive bias. However sustained selling towards the close saw the Sensex slump below 20,000 and end the session down 194 points at 19,784. The broad based Nifty slipped 37 points at 5,869.
The market breadth was weak as the losers outpaced the gainers. Of the 2,822 stocks traded on the BSE, 1,666 stocks declined, 1,087 stocks advanced and 69 stocks ended unchanged. Except a few, most of the sectoral indices closed in the red. The BSE Auto index dropped 3.12% followed by the BSE Oil & Gas index (down 1.14%), the BSE Bankex index (down 0.94%), the BSE FMCG index (down 0.68%). However, the BSE Realty index gained 2.36%, the BSE CG index added 0.80% and the BSE Metal index moved up by 0.65%.
Most of the index heavyweights witnessed heavy correction. Among auto majors Maruti Suzuki tumbled by 8.46% at Rs1,088, M&M dropped 7% at Rs741 and Tata motors lost 4.93% at Rs767. Among the other major losers SBI slumped by 2.63% at Rs2,062, HDFC slipped by 2.02% at Rs2,756, Reliance Industries shed 2.02% at Rs2,771, Grasim lost 1.98% at Rs3,730, Ranbaxy dipped 1.92% at Rs415. Select counters, however, bucked the downtrend and ended with gains. Reliance Energy advanced by 3.91% at Rs1,789, BHEL advanced 1.63% at Rs2,655 and L&T moved up by 1.06% at Rs4,323 while Bharti Airtel, NTPC, Ambuja Cement, Dr Reddy's Lab and Wipro ended with modest gains.
Over 3.98 crore Reliance Natural Resources shares changed hands on the BSE followed by Reliance Petroleum (3.26 crore shares), Tata Tele Services (3.25 crore shares), Power Grid Corporation (1.94 crore shares) and Manglore Refinery (1.67 crore shares).
Reliance Capital was the most actively traded counter on the BSE and registered a turnover of Rs828 crore followed by Reliance Petroleum (Rs755 crore), Reliance Natural Resources (Rs459 crore), Reliance Energy (Rs419 crore) and Reliance Industries (Rs331 crore).
Sensex sheds 194 points on hike in CRR; auto shares skid
The market plunged deep in red in late trade in what was a choppy trade today. Earlier, the market had staged a solid recovery after an initial fall in early afternoon trade that was triggered by the Reserve Bank of India’s raising cash reserve ratio (CRR) by a steep 50 basis points to 7.5%, at its mid-term review of the annual monetary policy announced at 12:00 IST today. RBI kept interest rates unchanged. Contrary to some expectations, interest rates may not soften in the near term.
Auto, banking and IT stocks were weak. Capital goods, metal stocks gained. Reliance Industries lost ground. Market breadth was negative. Most of the Asian markets were trading lower. European markets were subdued.
BSE Sensex ended down 194.16 points or 0.97% to 19,783.51. It opened on a strong note with an upward gap of 125.77 points at 20,103.44 and soon rose to strike an all-time high of 20,238.16 in early trade. At day's high of 20,238.16, Sensex had gained 260.49 points.
Sensex hit a low of 19,694.85 in late trade. At day’s low of 19,694.85, Sensex had declined 282.82 points. Sensex oscillated 543.31 points between a low of 19,694.85 and high of 20,238.16.
The broader based S&P CNX Nifty ended down 37.15 points or 0.63% to 5,868.75. It hit an all time high of 5,976 in early trade.
ONGC, Bharat Heavy Electricals, Larsen & Toubro and HDFC hit all time highs today.
The central bank raised the proportion of cash banks have to keep with it on deposit by 50 basis points to 7.5 % today to mop up excess funds, but kept its key lending rates unchanged. The central bank left the reverse repo rate, the rate at which it absorbs excess cash from banks, unchanged at 6%. The bank rate, too, was unchanged at 6%.
The market breadth was negative BSE: 1,051 scrips advanced as compared to 1,657 that declined while 345 remained unchanged. 8 of the 30 members of the Sensex pack were trading with gains.
The BSE Mid Cap index was down 0.43% to 8,048.07 and BSE Small Cap index was down 0.63% to Rs 9,644.44. Both these indices outperformed Sensex.
BSE Auto index (down 3.12% to 5,479.89),BSE Oil & Gas index (down 1.14% to 11,526.30) underperformed Sensex.
BSE Bankex (down 0.94% to 10,550.09), BSE Capital Goods index (up 0.8% to 20,006.57), BSE Metal (up 0.65% to 17,302.22), BSE Realty index (up 2.36% to 10,516.99), BSE IT index(down 0.58% to 4,647.53) outperformed Sensex.
The NSE F&O turnover was Rs 89,601.31 crore today as compared to Rs 69,537.38 crore Monday, 29 October 2007.
Nifty November 2007 futures contract was trading at 5,892, at a premium of 23.25 points or 0.39% over spot price of 5,868.75.
Auto stocks declined sharply. Mahindra & Mahindra (down 7% to Rs 740.60), Maruti Suzuki India (down 8.46% to Rs 1,087.95), Hero Honda Motors (down 2.61% to Rs 724.95), Tata Motors (down 4.93% to Rs 767.30) and Bajaj Auto (down 0.6% to Rs 2,487.05) edged lower.
Banking majors declined as the Reserve Bank of India raised CRR by a steep 50 basis points to 7.5%, in a bid to suck out excess liquidity in the banking system. ICICI Bank (down 0.73% to Rs 1,240.25) and HDFC Bank (down 1.25% to Rs 1,618.25) and State Bank of India (down 2.63% to Rs 2,062.20) edged lower. CRR deposits with the RBI earn zero interest for banks.
IT majors edged lower. Infosys (down 0.5% to Rs 1,851.30), Tata Consultancy Services (down 1.86% to Rs 1,048.50) , Satyam Computer Services (down 0.64% to Rs 479.45) edged lower. Wipro (up 0.01% to Rs 509.70) edged higher.
India’s largest telecom services provider Bharti Airtel (up 0.51% to Rs 999.75) edged higher. Dr.Reddy’s Laboratories rose 0.61% to Rs 615.45.
India's second biggest power utility in terms of revenue Reliance Energy (REL) was up nearly 3.91% to Rs 1,789.20 and was the top gainer from Sensex pack. REL said today that it will transfer its road, rail, real estate and other infrastructure projects to a separate unit.
India's largest private sector entity by market capitalisation and oil refiner Reliance Industries (RIL) declined 2.02% to Rs 2,770.50. It hit a low of Rs 2,746.
Capital goods stocks extended gains. Bharat Heavy Electricals (Bhel) rose 1.63% to Rs 2,654.55. It hit an all time high of Rs 2,750 today. Net profit of Bharat Heavy Electricals (Bhel) rose 91.01% to Rs 687.66 crore on 18.68% rise in total income to Rs 3965.36 crore in Q2 September 2007 over Q2 September 2006. The company announced the results after the market hours on 29 October 2007.
India's biggest engineering & construction firm by revenue Larsen & Toubro rose 1.06% to Rs 4,323. It hit an all time high of Rs 4,470 today. Suzlon Energy however declined 0.87% to Rs 1,980.45.
Housing Development Finance Corporation, India's biggest dedicated housing finance firm, declined 2.02% to Rs 2,756.25. It hit an all time high of Rs 2,965 today. Net profit of Housing Development Finance Corporation rose 75.64% to Rs 646.39 crore on 30.54% rise in total income to Rs 1888.60 crore in Q2 September 2007 over Q2 September 2006. The company announced the results after the market hours on 29 October 2007.
Reliance Natural Resources topped volume charts on BSE, clocking volumes of 3.98 crore shares. The stock gained 4.78% to Rs 115.15. Reliance Petroleum gained 5.34% to Rs 233.75 on volumes of 3.26 crore shares and stood second in terms of volumes. Tata Teleservices (Maharashtra) slipped 3.47% to Rs 45.85 on 3.25 crore shares. It was the third most traded counter on BSE. Power Grid Corporation of India advanced 2.05% to Rs 146.60. It notched volumes of 1.92 crore shares and secured fourth position. Mangalore Refineries and Petrochemicals surged 26.22% to Rs 80.40 and finished as fifth most traded counter with volumes of 1.67 crore shares on BSE.
Reliance Capital clocked the highest turnover of Rs 828.13 crore on BSE. The stock rose 14.75% to Rs 2,127.70. Reliance Petroleum clocked the second highest turnover of Rs 755.66 crore on BSE. Reliance Natural Resources clocked third highest turnover of Rs 459.82 crore. Reliance Energy (Rs 419.77 crore) and Reliance Industries (Rs 331.20 crore) were other turnover toppers.
Among side counters, Parle Software (up 20% to Rs 695.50), Siemens Medical (up 20% to Rs 1,110.60), Mangalore Refinery and Petrochemicals (up 26.77% to Rs 80.75), Celestial Labroratories (up 17.55% to Rs 59.95) edged higher.
ITD Cementation (down 23.07% to Rs 647.95) edged lower.
European markets were subdued today. France's CAC 40 (down 0.53% to 5,805.20) and UK's FTSE 100 (down 0.63% to 6,663.70) edged lower. Germany's DAX declined 0.44% to 7,973.61.
Asian markets were trading slightly lower today, 30 October 2007. Japan's Nikkei (down 0.28% at 16,651) Taiwan Weighted (down 0.53% at 9,757), Singapore's Straits Times (down 0.56% at 3,798.45), South Korea's Seoul Composite (down 0.51% at 2,052.37) edged lower. However, Hong Kong's Hang Seng rose 0.16% at 31,638.22.
Crude oil prices fell nearly 1% below $93 a barrel on Tuesday, 30 October 2007, fading from their latest record high as investors took profits from a rally fuelled by a Mexican supply outage and the spiraling dollar. US crude fell by 85 cents to $92.68 a barrel after hitting a record high of $93.80 yesterday, 29 October 2007. London Brent slipped 77 cents to $89.65.
Q2 September 2007 results announced so far have been decent to strong.
Watch out for banking stocks
Banking shares will be buzzing ahead of Reserve Bank’s review of the monetary policy. Most players expect the RBI to keep the policy rates unchanged during its credit policy review but a hike in cash reserve ratio is likely.
According to reports, engineering and construction major Larsen & Toubro has bagged the master contract for the redevelopment of the Mumbai airport. This could boost the company’s shares.
Telecom shares are likely to witness some action as TRAI has approved the reference interconnect offer of the three undersea cable owners — Reliance, Bharti and VSNL— paving the way for long distance operators and internet service providers to access the trios’ cable landing systems at competitive rates.
Reports suggest that billionaire Mukesh Ambani has become the richest person in the world, surpassing American software magnate Bill Gates and Mexican business tycoon Carlos Slim Helu and investment guru Warren Buffett. Reliance group shares could see a sentimental rise on the news.
The market will eye an array of corporate results to be declared today. Hindalco Industries, Ramco Systems, HMT, MTNL, Ispat Industries, Central Bank of India, Bombay Dyeing, Power Grid Corporation, Sterling Biotech, Birla Corporation, Hindustan Unilever, CESC, Puravankara Projects will announce earnings for the July-September quarter.
Eyes on credit policy
The market may rally further on expectations that the Reserve Bank of India won't surprise investors in today's credit policy meeting. Despite registering smart gains in yesterday's trades, the mixed Asian markets in current trades and rising oil prices could make the investors jittery from taking any fresh position. Among the local indices, the Nifty could test 6000 on the upside and has a strong support around 5700 level. The Sensex has a likely support at 19000 and may face resistance at 20500. On the earnings front Balaji Tele, Ceat, Crompton Greaves, DLF, Dolphin Offshore, Indotech Transformers, ONGC, Sesa Goa, SAIL, Tata Chemical, Tata Elxsi, Tata power, TTML and Unitech are expected to announce their quarterly numbers.
Major US indices registered significant gains on Monday, on expectations that the Federal Reserve will cut interest rates later this week despite record oil prices above $93 a barrel and another decline for the dollar versus the euro. While the Dow Jones flared up by 64 points at 13870, the Nasdaq moved up by 13 points to close at 2817.
Except Satyam all the Indian ADRs traded firm on the US bourses. ICICI Bank led the pack with gains of over 6.5% while Infosys, Tata Motors and HDFC Bank, MTNL, Wipro, VSNL, Patni Computer and Dr Reddy's added over 1-5% each.
Crude oil prices advanced further, with the Nymex light crude oil for December delivery gaining by $1.67 to close at $93.53 a barrel. In the commodity space, the Comex gold for December delivery gained $5.10 to settle at $792.60 an ounce.
Morning Call - Oct 30 2007
Market Grape Wine :
In House :
Nifty at a supp of 5867 and 5828 with resis at 5941 and 5997
Intra day: Sell IDBI below 146 with a TGT of 140 and a SL of 148.50
Buy Petronet LNG above 86 with a TGT of 90 and a SL of 84.20
F&O: Buy Relcap above 1880 with a TGT of 1935 and a SL of 1858
Out House :
Markets at a support of 19595 & 19339 levels with resistance at 19987 & 20120 levels .
Buy : RIL & RCap
Buy : REL & RPL
Buy : JSW & Sail
Buy : RComm & RNRL
Buy : IBull & Ibullreal
Buy : HCC & IVRCL
Buy : GTL & GTLInfra
Buy : Bhel & Grasim
Buy : LT & Aban
Dark Horse : ABAN , LT , REL , HCC , RIL , Jp , TVtoday & SBIN
Bullet for the Day : IBulls , HCC & GTL with stop loss .
Grey Market - Religare, Varun, Mundra Port
Reliance Power 53 to 54
Mundra Port & Sez 400 to 440 360 to 365
Varun Ind. 60 40 to 42
Religare Enterprises 160 to 185 300 to 310
Barak Valley Cement 37 to 42 22 to 24
Empee Distilleries 350 to 400 130 to 140
Circuit Systems (India) Ltd. 35 3 to 5
Rathi Bars 35 4 to 6
Allied Computers 12 18 to 20
SVPCL 40 to 45 5 to 7
Pre Market Watch
Indian market is likely to have a flat opening for the day with marginal gains, as the investors will be in a wait and watch mood for the RBI''s policy review. On Monday, the benchmark index Sensex ended with a gain of 734.50 points at 19,977.67 after touching the all time high of 20,024.87, whereas Nifty also closed with a good gain of 203.6 points to close at 5905.90. We expect that the market may trade a little cautious ahead of the RBI''s policy review. Further profit booking can be seen in the later stages on yesterday''s purchase.
On Monday, the US markets ended marginally up as the Dow Jones Industrial Average (DJIA) ended with a gain of 63.56 points to close at 13,870.26. Further the NASDAQ Composite & S&P 500 (SPX) index also ended up by 13.25 points & 5.70 points at 2,817.44 & 1,540.98 respectively.
Indian ADRs also ended in green. In telecommunication sector, VSNL & MTNL surged (5.02%) & (2.96%) respectively. In Metal sector, Sterlite Industries is up by (4.26%). In Banking sector ICICI bank & HDFC bank grew (6.53%) & (5.20%). Further in Technology sector, Patni Computers increased by (0.09%), along with Wipro (1.39%) & Infosys (3.51%).
The major stock markets in Asia are trading mixed. Hang Seng is trading with a gain of 114.36 points at 31,701.26. On the other hand, Japan''s Nikkei is trading lower by 117.44 points to trade at 16,580.64. Singapore''s Straits Times index is also trading down by 13.78 points at 3,806 and Seoul Composite lost 9.47 points to trade at 2,053.45.
On Monday, the FIIs stood as the net sellers as the gross equity purchased was Rs.4077.90 (in crores), and the gross debt purchased was Rs.25.30 (in crores) as against the gross equity sold was Rs.4334.70 (in crores) and the gross debt sold was Rs.153.10 (in crores). The net investment of equity was Rs.-256.80 (in crores) and the net debt investment was Rs.-127.80 (in crores).
Today, Nifty has support at 5,810 and resistance at 5,990 and BSE Sensex has support at 19,799 and resistance at 20,185.
Market to stay cautious ahead of RBI meet
The market is expected to stay cautious ahead of the Reserve Bank of India's (RBI) mid-term review of annual policy today, 30 October 2007. Also US Federal Reserve’s meeting on Wednesday, 31 October 2007 on interest rates, will be another key event to watch out. High volatility cannot be ruled out in these two days. Cues from global markets were positive.
As per reports, some bankers and economists expect a marginal cut in key short-term rates, while others feel that RBI might not do so in the face of inflationary expectations looming large due to surging global oil prices. Analysts speculate that Fed would cut rates by 25 basis points.
Asian markets were trading slightly lower today, 30 October 2007. Japan's Nikkei (down 0.70% at 16,580.64), Taiwan Weighted (down 0.06% at 9,803.76), Singapore's Straits Times (down 0.36% at 3,806), South Korea's Seoul Composite (down 0.46% at 2,053.45) edged lower. However, Hong Kong's Hang Seng rose 0.36% at 31,701.26.
US Markets advanced yesterday, 29 October 2007, on positive earnings reports and the anticipation of an interest rate cut. The Dow Jones industrial average gained 64 points to 13870.26, the S&P 500 index rose 6 points to 1540.98 and the Nasdaq Composite index firmed 13 points to 2817.
As per provisional data, FIIs purchased shares worth a net Rs 688.93 crore, while domestic institutional investors (DIIs) were net buyers of shares worth Rs 634.44 crore on Monday, 29 October 2007.
Crude oil prices fell nearly 1% below $93 a barrel on Tuesday, 30 October 2007, fading from their latest record high as investors took profits from a rally fuelled by a Mexican supply outage and the spiraling dollar. US crude fell by 85 cents to $92.68 a barrel after hitting a record high of $93.80 yesterday, 29 October 2007. London Brent slipped 77 cents to $89.65.
The BSE Sensex ended with a 734.50-point or 3.82% spurt to 19,977.67, on Monday, 29 October 2007. It hit an all time high of 20,024.87 in late trade. The broader based S&P CNX Nifty ended up 203.6 points, or 3.57%, to 5,905.90. It hit an all-time high of 5,922.50 in late trade on Monday, 29 October 2007. FII buying was primary driver of the rally. Q2 September 2007 results announced so far have been decent to strong.
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